Rupee ends steady; stocks extend gains

Reuters: The rupee closed steady on Friday as dollar selling by exporters offset importer demand for the greenback, while stocks edged higher for a third straight session. 

The rupee closed at 181.60/80 per dollar, unchanged from Thursday’s close, market sources said. On 3 January, the rupee fell to an all-time low of 183.00 against the dollar. 

The currency has appreciated 0.55% so far this year. 

Investors have been waiting for some cues over the Government’s borrowing and repayment of foreign loans, analysts have told Reuters. 

Worries over heavy debt repayment after a 51-day political crisis have dented investor sentiment as the country is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months. 

The Central Bank Chief last week said around $5 billion borrowing in the pipeline could help debt repayments. 

The International Monetary Fund last week said it would resume discussions for further disbursal of part of a $1.5 billion loan amid investor worries of heavy debt repayments. 

The rupee fell 16% in 2018 and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

The rupee has declined 4.7% since a political crisis started in October. That crisis had dented investor sentiment and delayed Sri Lanka’s borrowing plans. 

A series of credit rating downgrades after the political crisis have made it harder for Sri Lanka to borrow as it faces record high repayments. 

The Colombo Stock Index ended 0.3% firmer at 5,978.30 on Friday. The bourse fell 0.16% for the week. The benchmark index lost 5% in 2018. 

Turnover was Rs. 460.8 million ($2.54 million), less than last year’s daily average of Rs. 834 million. 

Foreign investors were net sellers for the first time in four sessions. They sold a net Rs. 22.9 million worth of shares on Friday. They have been net sellers of Rs. 2.07 billion worth of stocks so far this year and Rs. 15.5 billion since the political crisis began on 26 October.

The bond market saw outflows of Rs. 86.7 billion between 25 October and 16 January, the latest Central Bank data showed.